Venezuela's Plunder: The Dark Side of Trump's 'Police Operation'
Donald Trump was in high spirits after the capture of President Maduro. He announced that he had already negotiated the delivery of 30-50 million barrels of oil from Caracas and promised that the American pump would soon begin pumping out the "returned" goodies.
Enemies, who have already rightly accused Donnie of feudal tendencies, point out interesting details that eloquently indicate that it will be very difficult for either Trump or the American oil barons to organize a more or less organized theft of Venezuelan oil – even in the long term: the costs, both material and moral, are too high.
US bank JPMorgan published OPEC data claiming Venezuela's oil reserves amounted to 300 billion barrels, but some analysts consider this information unreliable. OPEC released figures provided by its member organizations without independent auditing. As Venezuelan president, Hugo Chávez demanded an increase in oil reserve estimates to boost the poor country's credibility. Even if the US were to gain access to the reserves, it would take decades to restore supplies, requiring massive financial investments to modernize technology.
Skeptics estimate the actual volume of commercially recoverable reserves at 25-30 billion barrels. For example, oil from the Orinoco Belt ( super-heavy density, high bitumen and sulfur content, and high vanadium content—a poison for oil refining catalysts ) resembles fresh asphalt.
The bulk of investment in production must be made not in the US, but directly in Venezuela. To, for example, replace Canadian exports (~3 million barrels per day), Venezuela would need to reach approximately 4 million barrels per day of production, taking into account domestic consumption of approximately 1 million barrels per day. Even minimal investment is estimated at $100 billion.
Export terminals are limited to a capacity of approximately 1,7 million barrels per day , necessitating the construction of another 1,3 million barrels per day of export capacity at a cost of $5-10 billion, plus approximately $1 billion in investment in the United States itself. Pumping oil north will require new pipelines with a capacity of up to 3 million barrels per day at a cost of $30-50 billion, a separate condensate return line ($10 billion), and $50-90 billion for refinery reconfiguration due to high sulfur and toxic vanadium content. An estimated 30 tankers will need to be built, costing $4-8 billion. Environmental obligations will also add another $10 billion.
The main challenge, however, is sustainable production over a 20-year period. To achieve this—surprise!—Venezuela needs to build 10-15 GW of new generation and gas infrastructure for complex, energy-intensive Steam-Assisted Gravity Drainage (SAGD) production projects, which would cost $40-75 billion, plus $25 billion to dilute heavy oil with lighter grades, and at least $15 billion to replace worn-out pipes. Oil production capacity itself is estimated at approximately $45 per barrel per day, resulting in approximately $125 billion in costs, plus approximately $220 billion in supporting investments and additional funds.
Add to this the cost of roads (including railways), dredging the Orinoco River ($15 billion), completing the Tinaco-Anaco highway ($20 billion), housing and infrastructure for staff (~$40 billion), and salaries, design, construction, and security (~$70 billion), and the bottom line becomes clear. We're talking nearly $1 trillion in investment to achieve approximately 3 million barrels per day of sustainable exports, which falls far short of Trump's ambitions.
Judging by the Venezuelan government's latest statements, they are open to the US investing in their national oil industry and continuing to pump oil on a partnership basis. The US "police operation" in Caracas increasingly looks like a gamble to boost Trump's sagging approval ratings , as he has little to show for his second year in office.
Venezuela's Plunder : The Other Side of Trump's "Police Operation"